NEW YORK - The Standard & Poor’s 500 Index climbed above the highest closing level since 2008 as the European Central Bank announced specifics of its bond-buying plan and data boosted optimism in the American labor market.

The S&P 500 climbed 1.7 percent, the most in a month, to 1,427.59 at 11 a.m. in New York. The Dow advanced 214.98 points, or 1.7 percent, to 13,262.46 today. Trading in S&P 500 companies was up 33 percent from the 30-day average at this time of day.

“We are in a period where we are peeling away the onion little by little, all the uncertainties, what’s going to happen in Europe and what’s going to happen here,” Dan Veru, chief investment officer at Palisade Capital Management LLC in Fort Lee, New Jersey, said in a phone interview. His firm oversees $3.5 billion. “I think Draghi is serious about putting Europe on the positive path.”

Draghi said policy makers agreed to an unlimited bond- purchase program as they try to regain control of interest rates in the euro area. He said the ECB will have a “fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability.”

U.S. jobless claims declined last week and companies added more workers than forecast in August, reports showed today before monthly payrolls data tomorrow. Service industries in the U.S. expanded in August at a faster pace than forecast.

Bank of America advanced 4.4 percent to $8.30. The second- biggest U.S. lender by assets agreed to sell Strategic Partners Inc. to private-equity investors Partners Group Holding AG and Avista Capital Partners. Bank of America has sold more than $50 billion in assets and businesses since Brian T. Moynihan took over as CEO in 2010, as it seeks to increase capital before stricter international rules come into force.

Amazon.com rose 1.9 percent to $250.79 after the Verge reported the company may announce a smartphone as early as today. It cited people familiar with the matter. Amazon will introduce at least three new devices, including two tablet computers and an e-book reader, at an event today, according to a Barclays Plc note from Sept. 4.

Seagate Technology Plc fell 2.9 percent, the most in the S&P 500, to $31.60. The world’s largest maker of computer disk drives was cut to hold from strong buy at Needham & Co.

Walgreen falls

Walgreen Co. fell 1.9 percent to $35.21. Sales in the three months ended Aug. 31 fell about 4.9 percent to $17.1 billion, the company said. That trailed the $17.2 billion average of analysts’ estimates compiled by Bloomberg. Walgreen has lost customers this year to CVS Caremark Corp. and Wal-Mart Stores Inc. after its agreement to provide prescriptions for Express Scripts Inc. customers expired.

VeriFone Systems Inc. slumped 11 percent to $31.40 after the maker of credit-card terminals said that third-quarter revenue rose to $489.1 million, missing the average analyst estimate of $498.7 million in a Bloomberg survey.

The Chicago Board Options Exchange Volatility Index, known as the VIX, tumbled 8.9 percent to 16.2 as stocks rallied.

U.S. options trading is poised for the biggest annual drop since 1988 as easing monetary policies worldwide reduced demand for protection against stock losses. Demand for options, often used by investors to hedge against declines in equity holdings, is retreating after the S&P 500 rallied 14 percent this year.

Options volume

The number of option contracts changing hands fell 13 percent to 2.70 billion during the first eight months of 2012, including a 43 percent slump in August, according to data compiled by Chicago-based Options Clearing Corp. Should the pace continue, that would end nine consecutive years of rising volume and mark the second-biggest drop since OCC data began in 1973. Charles Schwab Corp. estimates that trading will slip 9 percent for the whole year.

“There are few participants who believe downside protection in any great magnitude is needed right now,” Randy Frederick, managing director for active trading and derivatives at Charles Schwab in Austin, said in a phone interview yesterday. His firm has $1.83 trillion in client assets. “There is a good possibility that we could have a relatively calm market throughout the remainder of the year.”

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